The Fair Tax itself will be administered, in most states, by state tax authorities and by merchants. Each will receive 25 basis points out of their collections for their trouble. The tax, therefore, will be practically self-administering.

The prebate goes to everybody - as long as they are citizens or non-citizens lawfully residing in the United States. There is no means test. The relative benefit is disproportionately in favor of the poor.

A check goes to one member of each household, and the measure for the amount of the check is household size. The amount is based on the poverty level for the given household size - as determined by HHS (i.e., we don’t make it up), but the marriage penalty is removed. It’s a mechanical process.

All members of a household 18 or over must sign the application for the prebate and designate the persons in the household who will receive the check. The check can be split only once.

The genius of this system is that people who earn minimum wage are usually members of households that earn substantially in excess of the poverty level. Thus, household size is a more accurate measurement of essentials.

States indeed will have to revamp their tax schemes. Some will opt for “conforming state taxes” as defined by the bill.

I agree that special interests will not like the Fair Tax. That is why, over time, organized grass-roots support will drown out the special interests. Just remember, it is people who vote, not special interests.

~Jim Bennett

http://www.fairtax.org/site/PageServer?pagename=about_main

you will see that the “fair tax” is a national sales tax. It is not called a “flat tax” and Bruce does not call it that. The Fair Tax site says a “prebate” is given to every taxpayer (how do they define who that is?) So if the Government is going to issue a check for the fair taxes paid on the poverty level of existence, how do we get rid of the IRS? Someone must track wage earners or citizens to know to whom and where to mail the checks. Boy will this frost the unregistered illegals!.

The prebate is issued to whom? every citizen? What about children? Do they count the same as adults. Are single and married persons counted the same? Presently, parents are given deductions for children. So the prebate under the Fair Tax should continue that benefit and give a larger prebate to parents? What about retirees? As for retirees, many pay very low Federal income tax - mine being 2% of all income. To replace that with a “fair tax” that replaces FICA taxes makes me start paying FICA in my retirement.

As for the states with income tax, many rely on figures from the Federal tax form to calculate the state tax. The states will have to totally revamp their forms and calculation methods.

The truth is that neither the “fair tax” or the “flat tax” will happen because there are too many special interests. The changeover upheaval could even trigger a mild recession because of the disruption and the one-time cost of paperwork “reduction” for companies. I agree that the current tax code is too complex and convoluted. That makes a “fair” tax even more difficult to sell.

Did you know:
That a middle class worker in the 25% income tax bracket [& paying 7.5% to social security] wishing to work overtime to cover a $100 retail purchase has to earn $148 to clear that $100 that he needs? [do the math 100/67.5%]

That’s the equivalent of a 48% sales tax!!!!

Makes a 30%** Fair Tax [with no Inc Tax or Soc Sec Tax] look pretty good doesn’t it? **[It [effective rate] is actulaly less than 30% for this case]

Remember:
$148 Under current system
> $130 Under the Fair Tax

I would have expected more from the former deputy assistant secretary of the Treasury for economic policy from 1988 to 1993.

Did Mr. Barlett really write this or was there a ghost writer from some tax accounting firm?
“originally devised by the Church of Scientology”??? Wrong. They had a similar idea, but no connection to the FairTax Act. H.R 25. But so what? Karl Marx is behind our current income tax. See item 2 of the Ten Points of Communism.

Of course there is not 30% on top of current prices under the FairTax. If he had researched the issue he would know better.

It is 23 cents on the dollar at retail on before tax dollars. Our “former deputy assistant secretary “ forgot to remove the income tax. . Prices stay the same. Did he fail to do the math?
The income tax equation is income - taxes - compliance dollars = spending
The Fair Tax equation is income = spending + taxes + compliance dollars, so here we are taxed as we spend and keep the compliance costs.
Further, did Mr. Barlett look at any dynamic analysis of:
Adding 12 million tax payers ( illegal aliens and the underground economy)?
Returning an est. $11 trillion in off shore accounts to U.S. banks deposits?
The affects of a lower service cost of capital?
The revenue feedback and job growth from zero corporate income tax?

By research I don’t mean the FairTax book. I mean the works of his fellow economists. See below

I smell another motive here. Remember, after truly understanding the FairTax,
the only people who hate it are career politicians, lobbyists, tax lawyers, tax accountants, the non working rich, IRS agents, and illegal aliens. Those who derive their livelihood from the unproductive income tax hate the FairTax.

Ashford Schwall

Taxing Sales under the FairTax – What Rate Works?
http://people.bu.edu/kotlikof/BHI-LK%20Taxing%20Sales%20under%20the%20FairTax-%20What%20Rate%20Works%209-25-06%20FINAL.pdf by Paul Bachman
Director of Research, Beacon Hill Institute, Suffolk University
Jonathan Haughton Associate Professor of Economics Senior Economist, Beacon Hill Institute
Suffolk University
Laurence J. Kotlikoff Professor of Economics, Boston University
Research Associate, National Bureau of Economic Research
Alfonso Sanchez-Penalver Economist, Beacon Hill Institute, Suffolk University
David G. Tuerck Chairman and Professor of Economics
Executive Director, Beacon Hill Institute Suffolk University
September 2006
An Open Letter to the President, the Congress, and the American people Concerning Reform of the Federal Tax Code
(signed by 80 business and university economists)
http://www.fairtax.org/site/PageServer?pagename=news_commentary

A MACROECONOMIC ANALYSIS OF THE FAIRTAX PROPOSAL
February 2006 http://www.arduinlaffermoore.com
©2006 Arduin, Laffer & Moore Econometrics. All rights reserved.
http://www.arduinlaffermoore.com/PDF/A%20Macroeconomic%20Analysis%20of%20the%20FairTax%20Proposal%20–%20Summary.pdf

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